Schnurman: Raising minimum wage is 'the right policy'

A divided Congress may not raise the minimum wage, but why not Texas or maybe Dallas?

Last year, five states approved increases in the minimum wage, largely because it’s not high enough to keep full-time workers out of poverty. Twenty-one states and Washington, D.C., now require most employers to pay more than the federal minimum of $7.25 per hour.

In New Jersey, the governor vetoed a bill to raise the minimum wage, and residents responded by passing a constitutional amendment.

Several cities have set higher rates, too. Voters in SeaTac, Wash., approved a rate of $15 an hour for some workers. New York City’s new mayor is pushing a higher minimum, even with statewide increases already in the pipeline. In Santa Fe, N.M., the minimum rises to $10.65 on March 1.

Since the minimum wage was established in 1938, the federal rate has been raised 22 times. The most recent was in 2007, and support for an update is strong.

About 70 percent of Americans want to raise the minimum wage, according to a Quinnipiac poll last month. More than half of Republicans are on board.

At least 20 states are considering action this year, according to the National Conference of State Legislatures. At the same time, President Barack Obama and Democrats are calling to increase the federal rate to $10.10 by 2016.

“This is the right policy for the country and the people who live in Dallas, Texas,” said Mayor Mike Rawlings.

No state has more on the line. Almost 2 million low-paid Texans would get a raise if the minimum wage hit $10.10. That’s nearly twice as many potential beneficiaries as the next-closest state, according to a December analysis.

Almost one-third who would benefit are parents, and almost two-thirds work full-time.

Opponents insist that raising the minimum wage would lead to job cuts, hurting the people that it’s supposed to help. Evidence on that is mixed, both in academic journals and real life, which provides cover for politicians on both sides.

Rawlings, a longtime business executive, said he has reservations about regulators dictating to companies. Over the long term, he believes that education is the path to higher pay and less income inequality.

“But in the short term, this is the best we can do,” Rawlings said about raising the minimum wage. “It’s one tool we have, and paying $10 an hour is not going to kill this economy.”

He’s right about the economy, because Texas and Dallas have been leading the way in job growth, especially during the recovery. But unlike peers in other states, Rawlings’ hands are tied.

In 2003, the Texas Legislature prohibited municipalities from setting their own minimum wage, except in a few instances. These pre-emptive laws are in place in about 10 states, said Paul Sonn, general counsel of the National Employment Law Project.

While they ensure uniform rules, they prevent adjustments to the market. A family of four in Dallas must earn about $10,000 more per year than a family in San Angelo to get by, according to a family budget calculator.

Several cities in other states have enacted their own rates to counter those higher costs. Albuquerque, N.M., for example, has an hourly rate about $1 higher than the rest of the state. Santa Fe’s rate is a few dollars higher.

“They see this both as a way to address local living costs in high-cost regions — and to build momentum for increasing the state minimum wage, when state leaders are slow to act,” Sonn said.

Dallas has carved out its own space with payday lenders, primarily through planning restrictions. But state lawmakers refused to allow a local election on mass transit several years ago. They rejected Medicaid expansion, costing large hospitals billions.

Rawlings also cited conflicts over education; he’d like to start the school year earlier.

He said officials are locked out on the minimum wage, too.

“As a city, we ought to be part of the discussion,” Rawlings said.

Austin has found a way to set a higher standard. On projects that involve a city incentive, such as tax breaks or waived fees, the city now requires companies to pay at least $11 an hour in wages. State law allows for exceptions in a city contract, and Austin leaders approved the latest change last fall.

Voters in both red and blue states have approved minimum-wage increases, according to Arindrajit Dube, an associate professor of economics at the University of Massachusetts. Since 1998, he said, 10 states have approved increases, with no rejections.

Texas has a different history. In a 1997 election in Houston, 3 in 4 voters rejected an increase in the city’s minimum wage. Opponents, led by the food service industry, outspent supporters by 20-to-1 in the campaign, according to news reports at the time.

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About Mitchell Schnurman

Mitchell Schnurman has been writing about business news in North Texas for more than 25 years and has been a columnist since 2001. He joined The Dallas Morning News in 2012 after working at the Fort Worth Star-Telegram and Dallas Times Herald. He championed the lifting of the Wright Amendment, supported the American Airlines-US Airways merger and often weighs in on tax breaks for developers. Seven times, he’s been named one of the country’s “Best in Business” columnists by the Society of American Business Editors and Writers.